The difference, he said, is that software costs have come down so much that projects that would have been unrealistic in the first wave of Web development are now affordable, even cheap.
Kawasaki was referring to the new wave of open source software, programs that have typically appealed mostly to super geeks and which go by names like mySQL, PhP and Ruby on Rails. This software is free to all, and that fact is revolutionizing the way Web applications are built. It is also changing perceptions about return-on-investment in online marketing.
Free software is democratizing technology in new ways. The best programs are just as powerful and functional as software that costs hundreds of thousands of dollars. Individuals and lightly funded startups are using these tools to gain traction without the onerous funding requirements that saddled their predecessors.
Consider the year-old MothersClick.com social network. It has 25,000 members and 40,000 unique visitors per month. During the Internet bubble, this effort would have needed a couple million dollars to get off the ground, but MothersClick was built by a Bay Area mother and her husband in their own home.
The economics of free software work for marketers, too. A lot of attention has been showered on the ROI of online marketing, but much of the discussion has been about the "R" side of the equation. Now the investment variables are changing. Not only can marketers tap these tools to build networks and campaigns, but service providers are leveraging the low costs to offer services more cheaply.
For example, startup MuseStorm debuted last month with a site that marketers can use to create, distribute and track the performance of widgets, those ubiquitous online medallions that bedeck millions of personal Web sites. Not long ago, it cost thousands of dollars to build a single widget. MuseStorm automates the whole process on its site and bundles in distribution and tracking services at a CPM less than $1.50.
This trend will lead to a huge wave of innovation. The price of entry is low, and the penalty for failure often trivial. Meanwhile, businesses have less reason than ever to excuse themselves from online marketing because of cost. The return on social media campaigns may be elusive, but the required investment is rapidly coming within reach of even the most resource-strapped business.